Sistema Shyam TeleServices, the only participant in the government’s second round of 2G airwaves auction conducted today, has bagged licenses for eight circles for Rs 3639.80 crore, but will shut operations in three circles including Mumbai, R Chandrashekhar, Department of Telecommunication Secretary told CNBC-TV18.

The Indian arm of Russian conglomerate Sistema, had bid for eight circles which includes Delhi, Kolkata, Karnataka, Tamil Nadu, Kerala, West Bengal, UP (West) and Gujarat.

Sistema, however is unlikely to pay any money for these new licenses for at least next five years as the government has allowed the company to seek refund for Rs 1,658 crore which it had paid in 2008 for acquiring licenses, which were cancelled by the Supreme Court in February 2012 under the 2G scam.

The government has allowed operators to pay 33% of the winning bid amount upfront and the remaining after a two-year moratorium in equated yearly installments.

Sistema, which provides telecom services under the brand name MTS had applied for 11 licenses, but had bid for only eight circles. Today, Sistema said that it will ask users in the three unbid circles which include Mumbai, Maharashtra and eastern Uttar Pradesh to port out to other telecom operator of their choice.

With this, in total Sistema will shut operations in 13 circles. Last week only Sistema had announced to shut operations in 10 circles including Assam, Bihar, Himachal Pradesh, Andhra Pradesh, Jammu and Kashmir, Haryana, Madhya Pradesh, Orissa, North East and Punjab. The government had put up 800 Mhz, 900 Mhz and 1800 MHz band spectrum for auction, which were freed from cancellation of 122 2G licenses.

Despite 50% cut in reserve price in January, except Sistema Shyam no other major telecom players applied for the 800 MHz CDMA spectrum. In case of the 1800 and 900 MHz band, there were no application.